MUMBAI: Shares of Titan Industries plunged as much as 14 per cent in intraday trade today, following downgrades by brokerages after the latest move by the Reserve Bank of India (RBI) on gold imports.

The RBI, in a flip-flip move, has again modified the regulations on gold imports whereby the domestic buyers would be allowed to buy the yellow metal only against upfront payment.

According to analysts, as a result, Titan Industries' gold model leasing will be discontinued which will have a negative impact on the stock.

Early, this week, the government increased the import duty on gold to 10 per cent. The government also increased excise duty on refined gold bars to 9 per cent vs 7 per cent.

Most brokerages have downgraded the stock on concerns that the volatile regulatory environment will hurt the company's business model.

"After banning in June-13 and reversing the ban in July-13, the RBI has again discontinued the gold leasing. The 80:20 import procedure has also become stringent, which may lead to gold shortage in the upcoming festive season. Titan's repute should provide sourcing advantage, yet, higher financing costs results in 6-7 per cent EPS cut over FY15-16," the CLSA report said.

"RBI's hawkish policy on gold imports remains a key concern even while we believe that Titan is among the best plays on discretionary consumption. We downgrade the stock to 'Sell' and cut our price target to Rs 245/share," the report added.

JP Morgan is of the view that regulatory headwinds continue to weigh on Titan's stock performance. It has reduced FY14/15 EPS by 2 per cent/4 per cent building higher interest cost.

The brokerage has downgraded the stock to neutral from overweight and lowered target price to Rs 265 from Rs 285.

Credit Suisse has also reduced the target price to Rs 271 from Rs 305 on concerns over rising uncertainty in regulatory measures. While, it is of the view that earnings impact will be limited for Fy14, the brokerage has cut multiples to 23x from 25x.

Goldman Sachs expects 30-40bps lower jewellery EBIT margins for the company. It has downgraded the stock to 'Neutral' from 'Buy' as it sees higher funding cost for gold jewellery for FY14-16E. The target price has been cut from Rs 291 to Rs 260.

At 11:47 a.m.; the stock was at Rs 241.40, down 11.69 per cent, on the BSE. It touched a high of Rs 252.50 and a low of Rs 235.

On the NSE, the stock was at Rs 240.50, down 12.02 per cent. It touched a high of Rs 252.50 and a low of Rs 235.30.